Scholastic reduced its earnings estimates for the fiscal year, predicting the company will earn approximately $1.8 to $1.9 billion (compared to earlier estimates of $1.9 to $2 billion). Before trading opened for the day, the company stock had fallen 19 percent.
The technology and services segment sales took a hit this year, and the company blamed Common Core State Standards training costs and the uncertain federal budget as factors that reduced earnings. Here’s more from the release:
The Company’s outlook for its Children’s Book Publishing and Distribution segment was also revised to reflect lower sales in its Book Club business generally, lower than anticipated U.S. sales of The Hunger Games trilogy, and the impact of Superstorm Sandy on the School Book Fair and School Book Club businesses in the Northeast. In line with its previously communicated plan, the Company is investing in its digital initiatives at a higher level than in the prior fiscal year. (Via Sarah Weinman)